The ACIT, Circle-2(1), Guntur V. M/s Tirumala Milk Products Pvt Ltd., Narasaraopeta

ITA 242/VIZ/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7216 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 07-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

ITA 242/V/09 TIRUMALA MILK PROD. P LTD NARASARAOPET, IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 242 /VIZAG/ 20 09 ASSESSMENT YEAR : 2005 - 06 ACIT CIRCLE - 2(1) G UNTUR TIRUMALA MILK PRODUCTS PVT. LTD NARASARAOPET (APPELLANT) VS. (RESPONDENT) PAN NO.AA BCT7907M APPELLANT BY: SHRI TH.L. PETER, CIT(DR) RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER : - THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1. THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN ALLOWING THE ASSESSEES CLAIM FOR EXPENDITURE ON PLASTIC CANES AND CRATES AS REVENUE IN NATURE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, WHEN THE ASSESSEE IN THE EARLIER YEARS TREATED THE EXPENDITURE INCURRED FOR PURCHASE OF PLASTIC CRATES AND CANS AS CAPITAL EXPENDITURE, AND THEY ARE ENTITLED ONLY FOR DEPRECIATION AT THE RATES PRESCRIBED IN LAW, WHETHER THE ORDERS OF THE CIT(A) UPHOLDIN G THE CLAIM OF THE ASSESSEE TO TREAT THE SAME AS REVENUE EXPENDITURE IS NOT ERRONEOUS AND PERVERSE IN LAW? 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE ASSESSING OFFICER WITH HIS REASONING TREATED THE EXPENDITURE TOWARDS THE PLASTIC CANS AND CRATES AS PLANT AND MACHINERY AND ALLOWED DEPRECIATION AS PER THIRD PROVISO TO SEC 32(1)(II) OF THE I.T. ACT, REFERRING TO THE DECISION OF THIS HONBLE COURT REPORTED IN 175 ITR 154 (AP), WHETHER THE ORDERS OF THE CIT(A) ALLOWING THE APPEAL FILED BY THE ASSESSEE WITHOUT CONSIDERING THE SAID ASPECTS, IS NOT ERRONEOUS AND PERVERSE IN LAW? 4. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 2. THOUGH VARIOUS GROUNDS ARE RAISED BUT THEY ALL RELATE TO THE NATURE OF EXPENDITURE INCURRED BY THE ASSESSEES ON PLA STIC CANES AND CRATES. ITA 242/V/09 TIRUMALA MILK PROD. P LTD NARASARAOPET, 2 3. DURING THE COURSE OF HEARING OF THE APPEAL, OUR ATTENTION WAS INVITED TO THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE PERTAINING TO THE ASSESSMENT YEAR S 2001 - 02 AND 2002 - 03 IN WHICH THE IDENTICAL ISSUE WAS RAISED AND THE TRIBUNAL HAS TREATED THIS EXPENDITURE TO BE OF REVENUE IN NATURE FOLLOWING TH E ORDER OF THE TRIBUNAL IN THE CASE OF M/S. PALNADU DAIRY PVT. LTD. (ITA NO.47/VIZAG/2006, DATED 14.7.2006 ) . COPY OF THE ORDER OF THE TRIBUNAL IS PLACED ON RECORD. 4. THIS FACTUA L ASPECT WAS NOT DISPUTED BY THE REVENUE. THE CIT(A) HA S ADJUDICATED THE ISSUE FOLLOWING THE ORDER OF THE TRIBUNAL IN THE SAID CASE. WE THEREFORE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, WE CONFIRM THE SAME. 5. IN THE RESULT, THE APPEAL OF THE RE VENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 4.2 .20 1 1 SD/ - SD/ - (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 4 TH FEBRUARY , 20 1 1 COPY TO 1 ACIT, CIRCLE - 2(1), GUNTUR 2 M/S. TIRUMALA MILK PRODUCTS (P) LTD., D.NO.12 - 9 - 11, PRAKASH NAGAR, NARASARAOPET 3 THE CI T, GUNTUR 4 THE CIT (A) , GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM